2018 Market Review

The new year is well underway and the real estate market numbers are in.  There is a myriad of factors that have impacted the 2018 real estate market, everything from local, national, and international economy and politics to social and ecological factors.  In general, the national market continues its slow recovery (spanning the last 6 years) with the increase in median home sales, but not all cities, states, and regions can be easily deduced from national housing statistics flashed on news reports.  Ralph McLaughlin, deputy chief economist at CoreLogic, states that the markets showing the strongest year-over-year growth were places that had taken a long time to recover from the housing crisis. (Bankrate.com)

New Mexico is often an over-looked state when it comes to real estate but it does in fact have a diverse and bustling housing market.  According to Worldatlas.com Albuquerque, located at the center of the Rio Grande Valley, is the most populous city in the state and the 32nd-most populous city in the US.  And, with it being home to some of the nation’s leading high-tech research facilities like, Sandia National Laboratories, Intel, and the University of New Mexico, it’s no surprise that so many people call it home. With that said, the two largest national trends that have affected the housing market in the Albuquerque Metro area are affordability and supply (low housing inventory with high demand fueling price increases).

Your Local Real Estate Market Overview for 2018

The GAAR (Greater Albuquerque Association of Realtors) market report gathered from the SWMLS market areas (Albuquerque, Corrales, Placitas, Rio Rancho, Bernalillo, East Mountains/Estancia Basin and most of Valencia County) shows an increase in median sales price of 8.3 percent to $209,950 for Single-Family Detached homes and 11.9 percent to $155,000 for Single-Family Attached homes.

Despite the low inventory, decreasing by 16.6 percent for Single Family Detached homes and 21.9 percent for Single-Family Attached homes, new listings increased 11.8 percent and pending sales increased 22.1 percent for Single Family Detached homes.  New listings were down by 11.9 percent for Single-Family Attached homes but pending sales were up by 40.3 percent.

              See more detailed reports below.

2019 Predictions

Forbes.com predicts that cities with new migration inflows, good weather, and a booming economy will be good places for investors.  Jeremy Brandt, one of Forbes Real Estate Council members states, “The most promising areas for residential real estate investors are the south and southwest where there is high demand for entry level homes.”  With median sales prices at $209,950, a relatively low-level price tier, Albuquerque Metro area certainly fits the bill.

Inventory

With the economy steadily improving and with key industries bringing new jobs, there is mounting evidence that inventory will improve in 2019.  Just last October Netflix announced that Albuquerque will be the home of its new production hub which will bring $1 billion dollars in production to New Mexico over the next ten years and create up to 1000 production jobs a year.  This in turn will certainly have an impact on the local housing market.

Also, Millennials were estimated to represent an estimated 43% of the mortgages taken out at the end of 2018 according to Realtor.com.  As the largest generation in US history (gen-we.com), Millennials could contribute to a huge increase in first time home-buyers.  Not only that, thanks to their own financial growth and the rising economy, current Millennial home owners are able to take out larger mortgages which could spur momentum toward a better housing supply when upgrading to a larger home.

Affordability 

With rent steadily climbing in New Mexico many people are prompted to buy (Deptofnumbers.com).  Despite home prices being lower than the national average and the improving economy, homes are still not affordable—the increase in wages has not kept up with home price increases. Plus, New Mexico’s delinquent mortgage rate of 2.4 percent (higher than the national average) hasn’t helped.

What does all this mean for buyers and sellers?  

For the most part 2019 is predicted to be another good year.  A good market for sellers as inventory will still be slowly increasing. Albuquerque being on an upward trend of top places to live, and large industries investing in the area creating new jobs will help create a more balanced market. Buyers will still find increasing interest rates and increasing sale prices a challenge. Danny Vigil, President of GAAR is quoted in the Albuquerque Business First saying, "There's pressure on buyers with interest rates ticking up. Buyers are saying, 'if we're going to buy, we need to buy now,'" he said. "These are the kind of factors that will stay in place in 2019."

For most of the nation, the market has seen a massive cooldown, but Albuquerque hit a 12 year high for home sales and pending sales, Vigil says, “Whoever says the housing market is on a cooldown is not seeing the whole picture," he said, adding that Albuquerque usually lags national trends by six to 18 months.  So, hopefully that means, at least for now, that the housing market will continue to improve in the Albuquerque metro area.

If you have any questions about the local real estate market, or if you are considering selling or buying, please give me a call today so that I can help.

Keys to Real Estate Wealth in Rio Rancho and Albuquerque – by David Apodaca, Associate Broker and Owner of Southwest Realty.  My goal is to help people buy, sell and invest in real estate, and provide individuals with the keys to real estate solutions. 

Keys are important in real estate—keys not just to the door to your home, but the keys that are the knowledge about how to gain wealth by investing in real estate.  It can be as simple as maintaining your own home (maintaining its value or adding value), or investing in rental properties (individual houses or multifamily complexes like duplexes or fourplexes).  Knowing what you need to be doing and understanding the local real estate market are both keys to gaining personal wealth.

I can provide you with information so you can make more informed decisions—so that you can have the keys to unlock your potential wealth.  If you have any questions about the real estate or the real estate market in Rancho, Albuquerque, Bernalillo, Placitas, Corrales, the East Mountains, or the Jemez Mountains, Sandoval county or Bernalillo county, contact me today.  505-270-0302, David Apodaca.